KEY PERFORMANCE INDICATORS FOR SUPPLY CHAIN MANAGEMENT - Measurement of correct orders processed
The percentage of orders that are error-free = (error-free orders/ total orders) * 100
The number of days between paying for materials and getting paid for product Materials payment date – Customer order payment date
- Customer Order Cycle Time
Actual delivery date – Purchase order creation date Measures how long it takes to deliver a customer order after the new order is received.
The time it would take to fill a customer’s order if inventory levels were zero Sum of the longest lead times for each stage of the cycle Short cycles make for a more efficient and agile supply chain
The number of days it would take to run out of supply if it was not replenished Inventory on hand / Average daily usage SCM seeks to minimize inventory days of supply in order to reduce the risks of excess and obsolete inventory.
The percentage of items, SKUs or order value that arrives on or before the requested ship date (Number of On Time Items / Total Items) * 100 The on time shipping rate is key to customer satisfaction. A high rate indicates an efficient supply chain
Usually measured as the cost of freight per item or actual weight or CBM Total freight cost / number of items SCM seeks to minimize freight cost per unit
The number of times that a company’s inventory cycles per year Cost of goods sold / Average inventory Another metric that indicates how much inventory is sitting around. A higher inventory turnover indicates an efficient supply chain our stock count exercise and report will reveal this
- Average Payment Period for Production Materials
The average time from receipt of materials and payment for those materials (Materials Payables/Total Cost of Materials) * Days in Period It is in a company’s best interests to pay its suppliers slowly. The longer the average payment period the more efficient the business
The percentage of freight bills that is error-free (Error-free freight bills / Total freight bills) * 100
